The copper concentrate treatment and refining charges (TC/RCs) have long served as a barometer of the industry's health and a key indicator of supply-demand balance in the copper value chain. However, this metric entered a downward trajectory in August 2023 and plummeted precipitously in the fourth quarter of 2023, eventually falling into historic negative territory by February 2025. Mysteel's spot TC/RC index for 25% standard clean copper concentrates (CIF China spot procurement price for Chinese smelters) plunged 147% from its peak of $94.7/dmt and 9.47¢/lb on August 3, 2023, to -$44.25/dmt and -4.425¢/lb on May 27, 2025. The annual benchmark TC/RC similarly collapsed from $88/dmt and 8.8¢/lb in 2023 to $21.25/dmt and 2.125¢/lb in 2025.
Data Source: Mysteel
While a spread between smelter and trader spot TC procurement levels has been an industry norm due to differences in supply chain positioning, risk-bearing capacity, and risk premium allocation mechanisms, this gap has widened significantly amid the sustained TC decline, reaching as much as $60/dmt. Three fundamental drivers explain this divergence: mine-smelter capacity growth mismatch, differential risk allocation mechanisms (risk exposure & pricing logic), and transaction costs and supply chain hierarchy disparities. Consequently, the TC spread has evolved from a simple transaction cost variance to a core vehicle for redistributing industrial risk.
The TC crisis transcends price volatility, acting as a catalyst for value chain restructuring. Against the backdrop of copper demand growth driven by the green transition, the trajectory of TC will hinge on coordinated progress across four fronts: mine restarts/expansions, smelting/refining capacity policy adjustments, recycled copper substitution, and trade chain efficiency improvements.
Imported copper concentrate supply constraints will persist, keeping TC/RC depressed. However, Chinese smelters, facing compressed margins or even losses, are increasing procurement of scrap copper and domestic ores, creating strong resistance against further TC declines. Mysteel's spot TC index for 25% standard clean copper concentrates has fluctuated narrowly between -$45/dmt and -$42/dmt over the past month (May 6 - June 5, 2025), indicating stabilization. TC/RC is expected to hover in the lower-mid negative $40s/dmt range in the short term, with BHP tender results and Antofagasta's semi-annual benchmark negotiations serving as key swing factors.
Post-2026, TC should gradually recover to rational levels as African copper belt projects ramp up (e.g., Kamoa-Kakula Phase III), China's smelting/refining capacity policies recalibrate, and trade chain efficiencies improve through digitalization and logistics optimization.
For more details and insights, please subscribe to Mysteel Copper Weekly Report
Written by Paula Xu, xuzhongping@mysteel.com
